Ethiopia is considered as one of the most stable countries in Africa.
The Constitution of the country, adopted in 1995, provides for a multi-party political system.
Elections are held by universal suffrage every five years.
The FDRE has a parliamentarian form of government with a bicameral parliament which comprises the House of the Peoples’ Representatives (HPR) and the House of the Federation (HoF).
The House of the Peoples’ Representatives is the highest authority of the Federal Governm...

TRAINABLE LABOUR
• Ethiopia has a young, trainable and disciplined labour force.
• Private universities and colleges flourishing in Addis Ababa and regional cities.
• Over 30,000 university graduates per year, including business, management, economics, accounting, law and engineering graduates.
• Ample opportunity to meet the demand of skilled manpower in the technical and vocational field due to the expansion of Technical and Vocational Education and Training (TVET) college.
• Average priv...

1. STABLE ECONOMIC ENVIRONMENT
• Comprehensive development strategy resulting in strong economic growth.
• Stable macro-economic condition.
• Double digit economic growth averaging 11% per annum in the past 7 years.
• Generally, inflation managed at a single digit figure.
• Stable exchange rate.
• Government commitment to private sector.
• Safe and secure working and living environment, identified by the UN and the International Chamber of Commerce (ICC) as a key asset for investors in Et...

Agriculture

Agriculture is the backbone of the Ethiopian economy. The sector contributes about 43% of the GDP and 86% of exports. The export of Ethiopia is dominated by coffee and oil seeds, which together accounted to 50.6% in 2008/09. Other principal export commodities are ‘chat’, flowers, pulses, and live animals.

Ethiopia with 18 major agro-ecological zones and various agro-ecological sub-zones has a suitable climate for growing over 146 types of crops.

Ethiopia has suitable climate and types of soil required for the production of a variety of food crops. The major food crops grown are cereals, pulses and oil seeds. A broad range of fruits and vegetables and cut flowers are among fast-growing export agro-products. Organic coffee, cotton, tobacco, sugar cane, tea and spices are the main commercial cash crops grown in Ethiopia.

Livestock

Interestingly enough Ethiopia has the largest live stocks population in Africa. The CSA data shows in 2013 survey that Ethiopia has 53.99 million cattle, 25.5 million shops, 24.06 goats, 0.92 million camels, 50.38 million poultry, 9.01 equines and 10 million bee colonies.To empower the Ethiopian Meat and Dairy Industry Development Institute (EMDIDI) was established to support the Ethiopian Commercial Live Stock Sector through capacity building, through training, and consultancy, market promotion, and expansion as well as investment facilitation.

All these factors make Ethiopia one of the most promising countries to invest and expand business.With the largest number of milking cows in Africa, Ethiopians potential for diary development is considerable. However, productivity and consumption remain low. Ethiopians currently consume 19 liters of milk per year. This is just 10 percent of Sudan’s consumption and 20% that of Kenya.

Coffee Farming

According to The Africa Report of December 2, 2015 edition, just in July to this year Ethiopia exported 54, 000 tons of coffee worth 231.9 million compared with the $172.5 million it earned 51,000 tones over the same period last year.By the end of 2014/15 the export will be risen to 235,000 tones generally $862 million in revenue. It is a recent memory that Ethiopia exported 190, 000 tons in 2013/14 earning $841 million.

Ethiopia produce hit a high plateau by producing and still remain 5th of the top 10 countries in the world. In 2014 alone, according to World Atlas, Ethiopia produced close to 400,000 tons or 397,500,000 kilograms and employed close to 15 million people in coffee production.

Ethiopia is Africa’s leading producers of Coffee Arabica. The world “coffee” is said to come from Kaffa, a region where coffee has long been a wild crop. The country produces some of the best Arabica coffee in the world.

In Ethiopia, coffee grows in almost all regional states. The suitable climatic condition varies from the semi-savanna climate of the Gambella plain (500 m.a.s.l) to the continuously wet highland forest zone of the south west (2200 m.a.s.l). Coffee grows in the Ethiopian highlands ranging from 1500 to 2100 meters above sea level. The ideal soil for the crop is slightly acidic with a PH of 4.5-6.5. It requires annual rainfall ranging from 1500-2500 mm with balanced distribution.

Tea Farming

Ethiopian tea is some of the best quality tea in the world. In fact, tea from Ethiopia has won acclaim for its taste and aroma. The total area covered by teal plantation in Ethiopia is 2700 ha. Ethiopia produces only black tea type. But it has a potential to grow for all types of tea. Currently, it has a capacity to produce 7,000 tons of black tea per annum. The annual tea consumption of the country is about 5,000 tones.

The quality of tea mainly depends on climatic conditions, the type of soil upon which the plant grows and the method of processing. In Ethiopia, tea is mostly grown in the highland dense forest regions.

Sugar cane Plantation

In Ethiopia, sugar cane plantation started in 1954/55. Sugar has become one of the essential food consumption items in the country especially in urban areas. Though per capita sugar consumption in Ethiopia is one of the lowest in the world, the volume of consumption has been growing steadily since the establishment of the first sugar cane plantations-cum-sugar mills in the early 1950s. As a sweetening food item, sugar is used in preparing all types of drinks (coffee, tea, soft drinks, juices, etc) and foods (pastries, bread of special types, etc). White sugar is mainly exported to the neighboring countries such as Djibouti, Kenya and Yemen in quantities ranging between 30,000 to 50,000 tons per annum.

The gap between demand and supply required the importation of substantial amount of sugar from abroad. In view of the increasing demand, the government has plans to increase its annual sugar production. Thus, new sugar projects are under construction.

Oil Seeds Farming

A variety of oil seeds are grown in Ethiopia. The oil seeds produced are supplied both for the local and international markets. Rapeseed, linseed, groundnut, sunflower and cotton seed serve as raw materials for the domestic edible oil industry. Some oil seeds, including peanuts and sesame, are important export crops. Favorable agro-ecological conditions exist for the production and processing of oil seeds in Humera, Metema, Jawi, Chewaqa and Mankush.

Horticulture Farming

One of the most profitable investment sectors is horticulture. Even though the country began the flower industry in the late 90’s, Ethiopia became a formidable competitor to Kenya in the flower industry in Africa. Ethiopia, according to Ethiopian Flower Export Agency is targeting to export up to $500 million dollars by the end of 2016 calendar year. Ethiopia is the second largest flower exporter next to Kenya.

Commercial floriculture is still a relatively new industry in Ethiopia but it has emerged as a major non-traditional export sector. The rose industry has undergone successful development over the period 1998-2009.

With diverse agro-climatic zones, the long growing season and the availability of water for irrigation, most fruits and vegetables can be grown well in Ethiopia. Among the major fruits, mango, banana, papaya, avocado, citrus, grape, and pineapple are the most common tropical and sub-tropical types cultivated. While pear and plum are emerging temperate fruits in the country.

Ethiopia is now the second largest flower exporting country in Africa and the fourth in the world. It is also an ideal location for highland and low land world class flowers. The flower industry is one of the fastest growing sub sectors in the country.

The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, coriander, Cummins, cardamoms, corianders and black pepper. Currently, there are nearly 122,270 ha under spice farming. Spice production reached 244,000 tones per year. The potential areas for the cultivation of spice are Amhara and Oromiya, SNNPR and Gambella regions. The total potential for low land spice farming is estimated to be 200,000 ha.

Cotton Farming

Cotton is an important crop in Ethiopia. There is a huge potential for cotton cultivation in the country especially in Awash valley where large-scale cultivation under irrigation is found. Other potential areas for cotton cultivation are found in South Omo (Omorate), north western part of the country (Humera, Metema, Quara, and Belles Valley), Gambella, Tekezze valley, Dabus Valley and Wabeshebelle watershed area. Cotton production is well integrated into the rest of the economy with a large number of textile and garment factories relying on domestically produced cotton. Opportunities for the production and processing of cotton in Ethiopia are thus significant.

Pulses Farming

Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country.

Rubber and Palm Tree Plantation

Ethiopia has the potential for the production of rubber and palm oil.

Rubber is grown under large scale commercial production in hot tropical and sub tropical humid climatic zones. Moderate acidic or acidic soil is suitable to grow rubber. Therefore, in south-western part of Ethiopia these agro-climatic conditions exist for the production of rubber at commercial scale.

Palm tree is a perennial tree. It gives a higher yield of oil per unit area than any other oil seed crops. The plant can be grown in tropical and sub-tropical hot and humid climatic conditions. It can also grow in a wide range of tropical soils.

Cultivation of palm tree can either be carried out under irrigation or using natural rainfall. Many areas in the south-western part of Ethiopia have both the required soil and climatic conditions to grow palm oil in large scale.

Other Agricultural Products

A huge opportunity exists for the production of jatropha, castor bean and similar agricultural products for the domestic as well as the export market.

The estimated potential areas for the cultivation of various agricultural products in all regional states of the country are presented in the following table:

Maize is an important crop in Ethiopia. It is grown in the mid highland areas of the country. There are huge tracts of land in all regions suitable for maize farming. Maize is mainly produced in SNNPR and Oromia regions where there are about 1.77 million hectares under cultivation.

Wheat and Barley Farming

Wheat and barley are mostly grown in the highlands and mid highland areas of the country mainly in Oromia (Bale and Arsi Zones) and some parts of Amhara (North Gondar and North Shewa Regions).

Wheat and barley are the main cereal crops in the country with about 1,095,436 and 1,398,215 hectares under cultivation, respectively. The potential for the private sector in agro-processing and out growers’ scheme of development is significant. It offers excellent opportunities for production of wheat under irrigation in the Afar, Gambella, SNNPR and Somali Regions.

Oil seeds and pulses

A variety of oil seeds (e.g. sesame, rapeseed, linseed, groundnut, sunflower, Niger seed, cotton seed, etc.) are grown in Ethiopia. The demand for sesame has been increasing in the global market making sesame an increasingly important export commodity in Ethiopia. In 2008/09, Ethiopia exported 287,000 tons of sesame valued at 356.1 million USD, accounting for 24.6% of the total export earnings. Rapeseed, linseed, groundnut, sunflower, Niger seed and cotton seed also serve as raw materials for the domestic edible oil industry.

Cultivation of pulses like beans, peas, chickpeas, lentils, soybeans, etc. is also common in Ethiopia. Cultivation is carried out in both the highland and lowland areas of the country mainly by peasant farmers. Currently, the country exports a large quantity of pulses to the international market. There are also a number of factories that process pulses in the country.

Rice Farming

Rice could suitably grow in many parts of the country. The predominant potential areas are:

North West lowland areas of Amhara and Benshangul Regions (Jawi, Pawi, Metema and Dagur

Gambella regional state (Abodo and Etang Woredas)

South and South West Lowlands of SNNPRS (Beralee, Weyito, Omorate, Gura, Ferda, Menit)

Somali Region (Gode)

South Western Highlands of Oromia Region (Illubarbor, East and West Wellega, and Jimma Zones.

Spices

The major spices cultivated in Ethiopia are ginger, hot pepper, fenugreek, turmeric, cummins, cardamoms, corianders, and black pepper. Currently, there are nearly 122,700ha under spice farming. Spice production reached 244,000 tons per year. The potential areas for cultivation of spice are Amhara, Oromia, SNNPRS, and Gambella regions. The potential for low land spice farming is estimated to be 2000,000ha

Livestock farming, fishery and apiculture

Considerable opportunities exist for investments in rearing and breeding of livestock as well as in fresh water fishery development and the production of honey and beeswax.

The livestock population of Ethiopia is first in Africa and tenth in the world. The sub-sector has large resources, which include 50.88 million cattle, 25.98 million sheep, 21.80 goats and 42.05 million poultry. Opportunities are also available in ostrich, civet cat and crocodile farming.

Ethiopia’s potential for fishery development is limited to its freshwaters of most of the lakes that are located close to urban areas. The total fish catch potential from these waters is estimated at 40,000 tones per year. However, there is also an opportunity for investment in the construction of aquaculture to produce fresh water fish for local and international markets.

The current annual production of honey and beeswax of the country is estimated at 43.7 thousand tones and 3,600 tones, respectively. This provides a high investment opportunity in all aspects of the development of this untapped sub-sector in the production, collection, processing and marketing of honey and beeswax. In relation to this, the demand for the bee queen is growing rapidly providing an additional opportunity for investment.

Forestry and Related Activities

Potential activities for private investors in commercial forestry include the production and marketing of gum and incense, large-scale plantations for timber, the establishment of integrated forest-based industries such as pulp, and paper and chipboard.

Floriculture

Ethiopia is now the second largest flower exporter in Africa. It produces large budded and long stemmed

roses with vibrant colors. Many varieties are available and the main production season is from October to May. Flowers are produced in modern farms around Addis Ababa and in the Rift Valley and are exported via Bole International Airport in Addis Ababa. Temperatures are conducive to floriculture and there are long hours of sunshine – usually for more than eleven hours a day.

Water for irrigation is available in ample quantity and the well-drained soils in Ethiopia are suitable for growing horticultural products. Furthermore, a new environmental law was introduced to assess and regulate environmental impact before horticulural projects start and environmental auditing is conducted regularly to avoid pollution. Investors keen to fulfill their corporate responsibility will therefore be assured that Ethiopia promotes environmentally sustainable flower production. Roses are the most widely produced variety of flowers.

Other types of flowers currently in production include gypsophilia, hypericum, limonium, chrysanthemum, carnations, static and pot plants. The Ethiopian Highlands provide near ideal growing conditions for roses.

Vegetables, fruits, and herbs

Production of fresh vegetables, fruits, and herbs is a priority. Ethiopia produces and exports green beans, snow peas, broccoli, courgettes, okra, asparagus, cherry tomatoes, green chillis, fresh chives, parsley, rosemary, dill, basil, roccola, strawberries and table grapes. Seasons of production are compatible with many neighbouring countries and much of the land is suitable for organic certification.

The export performance of the sector had been limited to a very small volume to neighbouring countries and the European market. However, the export status is changing as more modern farms and processing enterprises are expanding. A huge effort is being carried out by the Ethiopian Horticulture Producers and Exporters Association (EHPEA) to link smallholders with the export market through an out-growers’ scheme. A project to facilitate diversification of production and smallholder farmer participation in exports is also being implemented. Farms who are already involved in export to Europe are certified for Good Agricultural Practice (GLOBALG.A.P) and their produce is handled in pack houses that meet the BRC standard.

Table 1. Agricultural Investment Land transfer facilitation service and requirements from Investors

No

Services

Required conditions and formalities from the investor

1

Provision of information about agricultural investment land potential and other relevant issues

investment license

supporting letter from the office represented and ID card/passport

2

Facilitation of filling the land request format, endorsement of the request and provision of feasibility study format

ID card/passport of the investor

Power of attorney( If it is from foreign country it has to authenticated by ministry of foreign affairs)

Memorandum of Association and Memorandum of Articles if the company is share company or plc

Investment license

Company Profile/track record/

Supporting letter from respective Ethiopian Embassy for foreigners and the Diaspora

Letter of interest to pay one year down payment.

Bank statement at least a year showing a balance of 30% of the investment and audit report done by external auditor